Lower Smackover Brown Dense Play

Southwestern Energy Reports Sixth Well Into Lower Smackover Brown Dense Formation

Southwestern Energy (NYSE:SWN) has been working on the development of various plays in its New Ventures portfolio, including the Lower Smackover Brown Dense formation in Arkansas and Louisiana.

Southwestern Energy has 506,000 net acres prospective for this play and has drilled six wells to date.  The company’s first three wells were completed in early 2012 and are currently shut in.  The Johnson #21-22-1 #1 and Dean 31-22-1E #1 were drilled to vertical depths of approximately 10,500 feet in Union Parish, Louisiana.

Southwestern Energy said that these two wells found higher pressures in the Lower Smackover Brown Dense formation and the company is analyzing log data and core samples to plan a hydraulic fracture operation.  The company also plans to reenter these wells as horizontal wells in 2013.

Southwestern Energy is currently completing the Doles 30-22-1H #1 well, also located in Union Parish, Louisiana.  This well was drilled to approximately 10,673 feet with a lateral length of 4,731 feet.  The company said that this well also encountered high pressure within the Lower Smackover Brown Dense formation and is currently flowing back.

Southwestern Energy plans to put the Doles 30-22-1H #1 well and the BML #31-22 #1-1H well onto sales in late November 2012.

Southwestern Energy Reports On Lower Smackover Wells In Louisiana

Southwestern Energy (SWN) provided updated information on the company’s development of the Lower Smackover Brown Dense formation.  The company has 563,000 net acres in Louisiana and Arkansas that is prospective for this play.

Southwestern Energy has worked on six wells into the Lower Smackover Brown Dense play to date, with the first two wells shut in for testing.

The BML #31-22 #1-1H well was drilled to a total depth of 14,700 feet with a horizontal lateral of 4,300 feet.  The BML #31-22 #1-1H well was completed with a 19 stage frac job and produced at a peak 24 hour rate of 421 barrels of oil per day.  Southwestern Energy has shut in the well for a pressure test and expects to put the well onto production in the fourth quarter of 2012. The BML #31-22 #1-1H well is Southwestern Energy’s third well and is located in Union Parish, Louisiana.

Southwestern Energy reported that the Johnson #21-22-1 #1 well, also located in Union Parish, Louisiana, was drilled to a total vertical depth of 10,507 feet and is currently waiting on completion.  The company said that the company will start completion operations on the Johnson #21-22-1 #1 well in August 2012.  Southwestern Energy expects to eventually reenter the well as a horizontal well at a future date.

Southwestern Energy is currently drilling two additional wells into the Lower Smackover Brown Dense play.  The Doles 30-22-1H #1 well is expected to be completed horizontally with a 6,000 foot lateral.  The company is also drilling the Dean 31-22-1E #1 well and has designed this well to be completed vertically at a depth of 10,450 feet.  Both these wells are located in Union Parish, Louisiana.

Cabot Oil and Gas Ends Development of Lower Smackover Brown Dense

Cabot Oil and Gas (COG) has decided to suspend development of the Lower Smackover Brown Dense formation.  The company said during the second quarter of 2012 conference call that the limited production from the first well did not support the cost:

"Since our investment plans for the foreseeable future are in existing areas of operations, the Marcellus, Eagle Ford/Pearsall, and Marmaton, the limited production coming from our first Brown Dense exploration well does not support its cost and therefore the well was written off...We will monitor peer activity before making any additional capital expenditures in the play."

Cabot Oil and Gas said that the company would write off the $10 million cost of the initial exploration well and watch other operators in the play before resuming development.  In April 2012, the company disclosed that the well was located in Union County, Arkansas, and achieved  a peak production rate of 206 barrels of oil per day with a ten stage hydraulic fracturing operation.

Southwestern Energy - Lower Smackover Brown Dense Comments - Fourth Quarter of 2011

Southwestern Energy (SWN) made the following comments about the Lower Smackover Brown Dense formation during the company’s conference call held on February 28, 2012, to discuss fourth quarter of 2011 earnings. The speaker is Steven L. Mueller, the CEO and president of Southwestern Energy.

“In our Lower Smackover Brown Dense play in southern Arkansas and northern Louisiana, we hold approximately 520,000 net acres at an average cost of $375 per acre. Earlier this month, we’ve began flowing back our first well in the area, the Roberson 18-19 #1-15H, located in Columbia County, Arkansas. This well had a vertical depth of approximately 9,369 feet and horizontal lateral length of approximately 3,600 feet and was completed in 11 stages. The lateral was landed in the lower 1/3 of the zone, and subsequent core analysis indicated this section had some of the lowest permeability in the entire interval. The well has been producing from 8 of the 11 stages, fracture stimulated. It has produced for 20 days of the originally planned 20- to 30-day cleanup period. Well production began on day 8, with the highest 24-hour rates to date of 103 barrels of oil per day, 200 Mcf per day of gas and 1,009 barrels of load water per day. 45% of load has been recovered to date.”

“Our second well, the Garrett 7-23-5H #1, located in Claiborne Parish, Louisiana, was drilled to a total depth in February 2012 of approximately 10,863 feet, with a 6,536-foot horizontal lateral. And fracture stimulations are planned to begin on March 1. Knowledge gains from the first well allowed us to drill the second well with no troubles and allowed us to target the Brown Dense drilling in the lateral and -- at no problems, allowed us to target the Brown Dense. Drilling in the lateral was not only faster, but oil shows in cuttings indicated better-quality rock.”

“We have also spud our third well, located in Union Parish, Louisiana, and is drilling at 7,900 feet. We're looking forward to learning more about this play, and our activity could increase dramatically if it is successful.”

Source: Seeking Alpha

Southwestern Energy - Lower Smackover Brown Dense Play Summary

Southwestern Energy (SWN) has 540,000 net acres under lease that is prospective for the Lower Smackover Brown Dense formation.  The acreage is located across parts of southern Arkansas and northern Louisiana.

Southwestern Energy said that the company’s average lease cost here was approximately $354 per acre and it holds an average net revenue interest of 82%.  The leases have four year terms along with four year renewals.

Southwestern Energy is targeting an upper Jurassic age oil formation at depths of 8,000 feet and a thickness of 300 to 550 feet.  The company has finished one well into the Lower Smackover Brown Dense formation and has at least two other wells in various stages of drilling or completion.  The three wells are:

Roberson 18-19 1-15H - Columbia County, Arkansas

Garrett 7-23-5H 1 - Claiborne Parish, Louisiana

BML 31-22 1-1H - Union Parish, Louisiana